What is NCLAT?

The National Company Law Appellate Tribunal (NCLAT) is the appellate authority constituted under Section 410 of the Companies Act, 2013. It was established on 1 June 2016, concurrently with the NCLT, to hear appeals against the orders of the National Company Law Tribunal. The NCLAT also serves as the appellate tribunal under the Insolvency and Bankruptcy Code, 2016, and under Section 53A of the Competition Act, 2002, making it a multi-jurisdictional appellate body of considerable importance.

Establishment and Legal Framework

The NCLAT was constituted by the Central Government under Section 410 of the Companies Act, 2013. Its creation was part of the broader reform to establish specialised tribunals for corporate and commercial matters. The NCLAT's jurisdiction was subsequently expanded by the Insolvency and Bankruptcy Code, 2016, which designated it as the appellate body for all orders passed by the NCLT under the IBC, and by the Competition Act, 2002 (as amended), which transferred appellate jurisdiction from the erstwhile Competition Appellate Tribunal (COMPAT).

Composition

The NCLAT is headed by a Chairperson who is or has been a Judge of a High Court. It comprises Judicial Members and Technical Members appointed by the Central Government. The Chairperson and members sit in benches of two or more members. The Principal Bench of the NCLAT is in New Delhi, while a circuit bench has been established in Chennai to serve the southern region.

Types of Appeals

NCLAT hears appeals against orders passed by the NCLT under the Companies Act (such as orders on mergers, oppression and mismanagement, and winding-up), orders under the IBC (such as admission or rejection of CIRP applications, approval of resolution plans, and liquidation orders), and orders of the Competition Commission of India (CCI). The scope of appeal extends to both questions of law and questions of fact, though the NCLAT exercises restraint in interfering with the commercial wisdom of the Committee of Creditors in IBC matters.

NCLAT vs. High Court

Prior to the establishment of NCLAT, appeals from the Company Law Board lay to the High Court. The NCLAT now serves as the exclusive appellate forum for NCLT orders, and further appeals from NCLAT orders lie to the Supreme Court of India under Section 423 of the Companies Act, 2013, or Section 62 of the IBC. This two-tier appellate structure (NCLT → NCLAT → Supreme Court) has streamlined the resolution of corporate disputes and reduced the burden on High Courts.